Speaking earlier this week at Nafcoc's AGM, held in Sun City, the minister said government was concerned by the poor participation by black small business in the formal economy and the poor participation by black businesses in high-growth sectors.
He reported that a recent DTI study of small business in South Africa showed that black businesses constituted only 33% of formal small enterprises in the country.
“In certain high-growth sectors, such as tourism and agroprocessing, the situation is worse, with some studies having put black participation in the tourism industry at less than 5%.
“When one looks at these figures we can see that a clear constraint to our economic growth is that the largest grouping of our population is not contributing sufficiently to the entrepreneurship base,” Mpahlwa said.
He argued that small business opportunities, which were not the subject of black economic empowerment (BEE) equity deals, were being ignored by black businesspeople.
“But when we look at the broadbased nature of BEE that the government is promoting, we see that small businesses form an integral part of our BEE plans.
“The BEE scorecards, which are contained in the BEE charters as well as the soon-to-be released codes of good practice, emphasise that broadbased BEE is about ownership, management, enterprise development, skills and human resource development, and a residual factor, which could include downstream beneficiation.
“Consequently, there is huge scope in this area for black businesspeople to create new enterprises by tapping into the opportunities in the marketplace that are not being fulfilled,” the minister argued.
He said that government was setting up the institutions and making available the finance to support enterprise development by black entrepreneurs, adding that many opportunities exist for such enterprises.
“There is a critical role for black businesspeople to play in making BEE happen not only at the level of equity in companies but, more importantly, by participating in small enterprises and taking advantage of the many opportunities available in our economy today.
“Our government has created a favourable environment in which business can flourish and a support framework for small businesses; what we now need is for South African businesspeople, supported by their chambers, to become more entrepreneurial, take the risks and drive our growth to the next level,” Mpahlwa concluded.
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